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To achieve success and results satisfying a wide range of stakeholders, the management and other decision-makers must consider that one of the central elements in the process mentioned above is the employee. Therefore, the employee’s well-being should play a crucial role in the management process (be a core stone in the decision-making process), and consequently, it should be considered an appropriate instrument to keep existing talents within the company and attract new ones. The main objectives of this chapter are to discover the level of the financial well-being of young adults in Latvia (the group of people responsible for the future sustainable development of the country) and to determine the factors influencing the level of financial well-being to create a prototype of financial well-being index. Based on an online questionnaire, the process first involves applying different statistical tests and regression analysis built-in MatLab programming. Second, we intend to create a prototype of the financial well-being index based on a three-step optimisation approach that allows determining the weightings for the factors selected as most important to influence the state of financial well-being and the scoring scale for each of the factors.

The current chapter deals with the environmental, social, and governance (ESG) integration issue that should contribute to the higher expected investment returns as different kinds of risk are managed in a better and more sufficient way. The goal is to study the ESG risks integration into the decision-making process and test the results. The research chapter intends to contribute to the existing discussion by evaluating some integration techniques. Following the development of the European Taxonomy, one can expect increased interest in integrating ESG risks into the financial forecast and asset valuation. The current chapter deals with Berger and UniCredit Bank’s (2010) proposal to include the ESG data as factors influencing the foretasted financial data in terms of direct costs (like energy, waste, water, and paper expenses; payments for sick leaves and employees’ turnover costs); externality costs (like CO₂ compliance costs) and opportunity costs (ESG provisions; expenses for board compensations). The chapter provides an overview of some integration approaches and discusses the idea of incorporating the ESG criteria into the stock valuation and portfolio management process. It is evident that the classical value investing approach is no more suitable. Nevertheless, the tested sample does not show significantly different results based on the backtesting. The research results could be interesting for authors preparing research on the field of sustainability and risk management as well as for portfolio managers considering the ESG integration to achieve the positive alpha.

The economic system is an expectation's feedback system, thus decisions made by economic agents are based on their expectations about the future state of the economy. These decisions affect actual realization of economic variables and this process leads to the new expectations. For a long period of time, economics was based on the erroneous belief that economic agents apply rational calculations to economic and financial decisions. The main purpose of the current paper is to present the theoretical model explaining emotion's component of expectations in the process of financial decision making.

The research is based on the generally accepted scientific qualitative and quantitative methods, including monographic method.

The paper shows how the expectations and subjective beliefs of different financial market participants could be translated into prices. After describing the main investor's categories, it is possible to model their subjective beliefs about the current price evolution on the stock exchange and formulate the demand strategy of each investor's group. Finally, the model shows mathematical considerations how prices result from demands, considering that they are set by the market maker.

The paper shows how emotions impact investors' beliefs and could be transmitted into prices. A particular agent category – the emotional investor – was formulated, who exclusively follows his intuition and whose presence influences market prices. So, there is no doubt that an appropriate rational strategy requires the adoption to the new kind of market agent and theoretical considerations presented in the paper could contribute to this process.